Durrant Pate/Contributor

The national budget of Jamaica has surpassed the J$1 trillion mark as it was tabled in Parliament earlier this afternoon for the upcoming 2023/2024 financial year.

Finance Minister Dr Nigel Clarke, who tabled the 2023-2024 Estimates of Expenditure, highlighted, “this is the country’s first trillion-dollar budget, which is allocated across main expenditure categories with J$665.7or 22.5 per cent of gross domestic product (GDP) to non-debt recurrent expenditure; J$75.3 billion or 2.5 per cent of GDP to capital expenditure and $218.6 billion or 9.5 per cent of GDP going to debt servicing.”

Included in the non-debt recurrent expenditure are allocations to implement the second year of the three-year public sector compensation restructure and allocations to operationalise the independent Fiscal Commission.

In giving a breakdown of the planned expenditure, Clarke explained that the allocation for capital expenditure takes into account the existing capacity to implement capital programmes and focuses on the priority areas to enhance development.

Continued drop in debt servicing costs

Debt service at 9.5 per cent of GDP reflects both amortization meaning principal repayments and interest payments reflect action taken over prior years to reduce the country’s debt burden. Interest payments, at J$155 billion for this fiscal year, will be fully financed by revenues.

Clarke told the House of Representatives that, “overall public debt is estimated to end the current as at March 31, 2023 at 79.7 per cent of GDP. This is expected to decline further to 74.2 per cent of GDP by 2023/2024. Madam Speaker, this is a projection….that should it be achieved would be the first time since the financial sector crisis through FINSAC…..that debt has entered the domain of pre-FINSAC levels.”

Central Government revenues and grant inflows are estimated at J$897.6 billion, which alongside the line expenditure of J$887.7 billion will generate the required fiscal balance surplus of J$9.9 billion or 0.3 per cent of GDP consistent with the agreed fiscal rules.

The finance minister advised the parliament that the revenue estimates this year reflect the original budget tabled in March 2022.

Public wages the largest single item of expenditure

Wages and salaries in the public sector represented the single largest component of the budget with J$338 billion being allocated for the second year of the current three-year compensation package. Clarke is warning that there is no room in this year’s budget for payments outstanding from 2022/2023 to be paid out during the 2023/2024 fiscal year.

He declares that the amount of $338 billion only reflects payments for the 2023/2024 period.

According to the finance minister, “we are therefore working feverishly to make ourselves available to complete the public sector restructuring in the remaining weeks of the year to facilitate fiscal year 2022/2023 salaries in fiscal year 2022/2023. Any of these amounts not paid this fiscal year will have to be paid over a year beginning the fiscal year following this coming one…There are only a few weeks left we are available morning, noon, night, weekday and weekends. Let’s talk, let’s get it done.”

Opposition raises concerns

Opposition Spokesman on Finance Julian Robinson expressed his concern about the public sector compensation review and how it is being implemented. He said workers from across the public sector have raised questions about their revised salary and the process of placing them in categories in the new compensation system.

“In many cases, the workers complain that when their net salary is computated they are going to be worst off position than before; so there is an issue. There are many questions, legitimate questions, which have not been satisfactorily addressed,” argued Robinson.

He drew reference to the industrial action taken yesterday by workers at the Registrar General’s Office about their compensation review. Robinson made the point that there are many gaps in the compensation review that needs to be addressed and welcomed the finance minister’s commitment to meet with the public sector groups morning, noon or night to settle the compensation review.